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February 27th, 2015
2014 FULL YEAR RESULTS
Disclaimer
Confidential
IMPORTANT NOTICE: By attending the meeting where this presentation is given, or by reading the presentation slides, you agree to
be bound by the following limitations and qualifications:
Certain information included in this presentation are not historical facts but are forward-looking statements. Such forward-looking
statements speak only as of the date of this presentation and Groupe Fnac expressly disclaims any obligation or undertaking to
release any update or revisions to any forward-looking statements in this presentation to reflect any change in expectations or any
change in events, conditions or circumstances on which these forward-looking statements are based. Such forward looking
statements are for illustrative purposes only. Investors are cautioned that forward-looking information and statements are not
guarantees of future performances and are subject to various risks and uncertainties, many of which are difficult to predict and
generally beyond the control of Groupe Fnac, and could cause actual results to differ materially from those expressed in, or
implied or projected by, such forward-looking information and statements. These risks and uncertainties include those discussed or
identified under the Chapter 6 “Facteurs de Risques” of the Groupe Fnac’s 2013 registration document which has been registered
with the French Autorité des marchés financiers ("AMF") under n°R14-021 on 24 April 2014, and which is available on the AMF's
website at www.amf-france.org and on Groupe Fnac’s website at www.groupe-fnac.com.
This material was prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any
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February 27th, 2015
2
2014: accelerating our transformation
 2014: An improved performance on all indicators reflecting the rapid
execution of Fnac 2015 strategic plan and a culture of constant adaptation
and innovation
 Acceleration of sales momentum

Sales up 0.9% in 2nd half

Revenues stable for the full year (vs a -3.1% decline in 2013)
 Continued market share gains
 Current operating income up 7.4% vs 2013
 Net income of €41m (vs €15m in 2013)
 Significant improvement in free cash flow : €72m (vs €48m in 2013)
February 27th, 2015
3
February 27th, 2015
Strategic review
Innovations and « Fnac 2015 » are the pillars of solid
performance in 2014
Fnac 2015
Innovation and Agility
 Expand omnichannel proposal
 A culture of constant innovation
 Reinforce commercial attractiveness
and customer service

Product offering

Services
 Accelerate growth levers

Online

New store formats


New products
New store formats
2014
 Accelerating transformation
 Solid operational and financial performance
February 27th, 2015
5
Expanding our omnichannel model
 Success of innovative omnichannel features
“click & collect 1h”(1) and “click & mag”(2)
 Marketplace gross merchandise volume up 25%

Rapid ramp-up in Spain and Portugal and robust
growth in France
 M-commerce gaining momentum



Modernized and efficient apps: Ticketing app (2013),
new Fnac.com app (2014), Fnac.pt app (June ’14)
Omnichannel sales in France
(%web sales)
29%
35%
22%
12%
2011
2012
2013
2014
Acceleration of mobile traffic on both Fnac.com
and Fnac Spectacles
M-commerce successful in driving instore traffic
(mobile-to-store)
(1) Pick up web order in store in 1h
(2) Order online from a store
February 27th, 2015
6
Introduction of innovative services
 New online delivery services


Fnac Express+(1)
Fnac 3h Chrono(2): the fastest offer on the market
 New instore initiatives to improve customer service



Deployment of Fnac Shop(3),
Accelerated check-out process (sales force cashing,
mobile and self check out, …)
Completion of sales force training program
 Customer satisfaction index sharply increasing
 Launch of Pass Location(4)


Immediate success
Value proposition attuned to new consumption usage
(1) Unlimited express delivery of any product available on Fnac.com for an annual fee
(2) Home delivery within 3 hours of placing the order
(3) A digital tool for store sales force offering full access to online offer and customer base
(4) Exclusive rental service available on all IT products and game consoles
February 27th, 2015
7
A unique ability to move early on fast-growing
categories
 Successful deployment of mobile phone sections
in France since Feb ’14


Double-digit market share reached in a few weeks
High attachment rate to services and accessories
 A cutting-edge strategy in connected objects


First retail banner to implement dedicated corners
in all its stores (Sep ’13)
Leadership position in wearable devices
 New “Fnac connect” stores to seize market potential


Opening of a flagship store dedicated to connected objects
and mobile phones in Paris on the Champs-Elysées (June ’14)
Upcoming launch of a new store concept dedicated
to Connectivity: “Fnac Connect”


To be rolled-out as corners in existing Fnac stores or as stand-alone
shops (80 to 100 sqm)
1rst opening in March ‘15 in Angoulême
February 27th, 2015
8
Rapid ramp-up of new product categories
 Contribution of new product categories to sales almost
doubled in 2014
 Stationary sections deployed in France in 2014


Share of new categories
(% of Group sales)
11%
4%
13%
6%
FY 2012 FY 2013 FY 2014 Q4 2014
Differentiating product mix and merchandising
Results above expectations confirming
the potential of the category
 Good performance of Kids and Home & Design,
deployed in all countries
February 27th, 2015
9
Offensive commercial strategy
 Further online / offline price alignment
 Tight monitoring of online price
vs pure players
 Targeted promotions
 Development of bundle offers
 Exclusive promotions with suppliers
 Exclusive offers for members
 Visible communication campaigns
February 27th, 2015
10
Proximity format expanding rapidly
New format store network
 11 new formats openings in 2014


Of which 10 proximity stores
Including the conversion of 2 Intermarché
« culture & loisirs » into Fnac Proximity
 Successful internationalisation of the model


34
10
16
2
23
5
15
14
18
19
10
2011
2012
2013
2014
Travel
Proximity
1rst opening in 2014 in Spain (proximity store)
and Brazil (travel retail)
Proximity format: 3 openings in Portugal in 2014
 Constructive discussions with Intermarché
in France

One Fnac proximity opening in Q3 ’15 as a creation

Further conversions scheduled in the course of 2015
February 27th, 2015
11
February 27th, 2015
Financial review
Key financial highlights
 Group sales stable for the full year

Acceleration of sales momentum throughout the year

Sales up +0,9%* in the 2nd half vs a -1.1%* decrease in the first half
 Sales up in France and the Iberian Peninsula
 Current operating income up 7.4% to €77m
 Strong increase in net income to €41m (vs €15m in 2013)

Net current income up 14.3% to €50 m
 Improved free cash flow generation: €72m (vs €48m in 2013)
 Strengthened financial position

Net cash position of €535m at end 2014 (vs €461m at end 2013)
* at comparable scope of consolidation and constant exchange rates
February 27th, 2015
13
Positive sales momentum continued in the 4th quarter
Group sales evolution
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q4 sales evolution
Q3
2014
2.0%
0.6%
Q4
2014
Group
France
0.1%
0.1%
0.1%
Brazil
Other
Countries
1.8%
-1.5% -0.6%
-5.3% -5.1% -4.9%
Iberian
Peninsula
X%: vs n-1
at comparable scope of
consolidation and cst FX
Like-for-like:
1.0%
-1.1%
-4.1%
 Higher comparison basis and weaker markets vs 3rd quarter
 Like-for-like sales up 1.0% in France
 Strong expansion with 4 proximity stores opened in Iberia
 Efficient omnichannel process and perfect logistics execution during holiday campaign
 Increased customer satisfaction
 Web-generated sales strong until later in the season
 Strong Black Friday and Christmas commercial campaigns
 Gross margin under control
February 27th, 2015
14
Group returning to sales growth in 2014
Sales evolution *
H1 2013
H2 2013
H1 2014
Market share evolution – 2014 vs 2013
H2 2014
2014 gross margin evolution vs n-1
+0.6pt
0.9%
-1.5%
-1.1%
France
-5.2%
FY 2013: -3.1%
+0.2pt
FY 2014: 0.0%
Editorial Products
+0.1pt
-0.3pt
+0.2pt
Iberian Peninsula
-0.6pt
H1
H2
Technical products
 Acceleration of sales momentum throughout the year
 Sales up 0.9% in the 2nd half, stable on a full-year basis
 Market share gains in France and the Iberian Peninsula
 Better resistance of gross margin in the 2nd half (-30bp)
 Sluggish consumption environment in all countries – Markets more promotional
* Vs n-1 at comp. scope of consolidation and constant FX
February 27th, 2015
15
Current operating income up 7.4% to €77m
€m
2013
REVENUES
2014
% CHANGE
3,905
3,895
-0.3%
Gross Margin
% Revenues
1,164
29.8%
1,144
29.4%
-1.8%
Personnel costs
% Revenues
-559
-14.3%
-555
-14.3%
0.6%
Other expenses
% Revenues
-466
-11.9%
-441
-11.3%
 Full-year sales stable at comparable
scope of consolidation and constant FX
 Decrease of 40 bp in gross margin rate
mostly due to


5.3%

EBITDA
140
147
3.6%
3.8%
-68
-70
-3.2%
Current operating
income
72
77
7.4%
% Revenues
1.8%
2.0%
% Revenues
Depreciation
(1)
Reinforced commercial attractiveness
Specific commercial investments related
to mobile phone launch in France
Unfavorable category mix
5.4%
 Costs down -3%

Good execution of cost-saving initiatives
in all countries
 Current operating income up 7.4%
(1) Depreciation, amortization & provisions
February 27th, 2015
16
France returning to sales growth and improving profits
€m
Revenues
2013
2014
2,762
2,777
Change at comp. scope
of consolidation
Current
operating
income
Operating margin
2014 sales evolution
% Change
0.5%
FY 2013
S1 2014
0.4%
42.7
1.5%
47.3
10.8%
1.7%
-0.8%
-2.7%
S2 2014
1.3%
FY 2014
0.4%
Like-for-like:
2.3%
X%: vs n-1 at comparable scope of consolidation
 France returned to growth in 2014, with like-for-like sales up 1.3%
 Sales momentum accelerated in the 2nd half with like-for-like sales up 2.3%
 Successful innovations
 Market share gains
 Gross margin under control
 Good execution of cost-saving program
 Current operating income up 10.8%
February 27th, 2015
17
Iberian Peninsula improving strongly in 2014
€m
2013
Revenues
Current
operating
income
Operating margin
654
2014
659
% Change
0.7%
FY 2013
S1 2014
S2 2014
1.3%
0.0%
21.3
23.6
3.3%
3.6%
FY 2014
0.7%
10.8%
-4.2%
X%: vs n-1 at comparable scope of consolidation
 Sales up 0.7%
 Double-digit growth in internet sales . Successful development of marketplaces
 Stable store sales*
 Renewed market share gains despite promotional markets
 Strong expansion of new formats: 3 proximity stores opened in Portugal
and the 1st proximity store in Spain
 Increase of 10.8% in current operating income
* Restated from the impact of Xanadu closure
February 27th, 2015
18
Brazil facing a complex environment
€m
2013
Revenues
197
2014
175
Change at constant
rate
Current
operating
income
Operating margin
-11.3%

FY 2013
S1 2014
S2 2014
FY 2014
-3.4%
0.7
-0.9
0.4%
-0.5%
N/A
 Poor sales performance caused by

% Change
-1.0%
-0.6%
-3.4%
-5.6%
X%: vs n-1 at at comparable scope
of consolidation and constant exchange rates
The economic downturn
World Cup impacting footfall
 Decrease in sales driven mainly by editorial products (weaker line-up) – Sales growth
in technical products
 Continued growth in internet sales
 New store at Sao Paulo Airport (travel retail format)
 Costs under control
February 27th, 2015
19
Belgium and Switzerland: solid resistance in H2
€m
2013
Revenues
292
2014
284
Change at constant rate
Current
operating
income
Operating margin
% Change
-2.6%
FY 2013
S1 2014
S2 2014
FY 2014
-3.1%
-0.7%
7.1
7.1
2.4%
2.5%
0,0%
-3.1%
-5.6%
-6.0%
X%: vs n-1 at at comparable scope
of consolidation and constant exchange rates
 Sales performance improving significantly in the 2nd half

Successful marketing campaigns

Increased contribution of new product categories
 Success of the Belgium web platform reshaping
 Profitability stabilized
February 27th, 2015
20
Ticketing: successful development in 2014
 Satisfactory performance of the ticketing business (BtoC), with sales volume up

Internet driving the growth, benefiting primarily from increased IT investments

Distribution reach increased

Double-digit growth in Tourism & Entertainment and Art & Museums segments

Good resilience of the Music segment despite a weaker line up context
 Strong growth of sales for the software ticketing services business (BtoB)

Integration of Datasport within Kyro completed in 2014

Strong increase in number of customers, including prominent events

BtoB segment confirming potential
 Operating income up
February 27th, 2015
21
Sharp increase in net income
€m
Current operating income
Non-current operating income
and expenses
2013
2014
%
Change
72
77
7.4 %
-29
-9
68%

Operating income
43
68
57%
Financial charges
-12
-12
-3%
Tax
-16
-15
7%
Net income from continuing
operations
16
41
160%
Net income from discontinued
operations
-1
0
na
Consolidated net income
15
41
180%
Net current income from
continuing operations
44
50
14.3%
2.62
2.97
13.4%
EPS*
 Lower non-current operating items
Resulting mainly from lower
restructuring costs
 Stable financial and tax charges
 Consolidated net income up: x2.8
 Net current income from continuing
operations up 14.3%
* Fully diluted – continuing operations, excluding non-current items
February 27th, 2015
22
Cost savings well above target
Cost savings
 Good momentum in cost reductions
continued in 2014

€118m vs objective of €80m
€63m cost savings delivered in 2014
 €118m cost savings generated in the
2013-2014 period vs an ambition of €80m
 Objective of €30m - €40m cost reduction
in 2015
€60m
€55m
€63m
€30m€40m
€19m
2012
2013
2014
2015
2012 actions
2013 & 2014 actions
2015 ambition
February 27th, 2015
23
Sharp improvement in free cash flow generation:
+51% vs 2013
€m
2013
2014
Var.
122
+31
Cash flow from operations before
tax, dividends and interest
91
Change in inventories
17
4
-13
3
14
+11
Net CAPEX
-53
-54
-1
Tax
-10
-14
-4
48
72
24
Change in other working capital *
Free cash flow
 Strong increase in cash flow from
operations thanks to


Improved operational performance
Lower non-current cash items,
primarily restructuring costs
 Good management of working
capital


Further reduction in inventories
Good management of suppliers’
terms and rebate receivables
 CAPEX still under control (€54m)
 Free cash flow up +51% to €72m
* Including change in liabilities relative to capex for an amount of -€4m in 2013 and -€5.4m in 2014
February 27th, 2015
24
A stronger balance sheet
€m
31/12/2013
31/12/2014
Shareholders’ funds
550
595
Net cash
461
535
 Net cash position increased to €535m at end 2014 compared to €461m at end 2013
 Higher level of shareholders’ equity (close to €600m)
 Financial covenants met on the €250m revolving credit facility


Facility not utilized in 2014
Facility maturity extended to July 2017 (from April 2016) as per amendment signed
with the syndicate of lenders on July 24th
February 27th, 2015
25
February 27th, 2015
Conclusion
Conclusion and outlook
 2014 results reflect the acceleration of the Group’s transformation and its ability
to innovate to adjust its model to changing consumer uses
 Consumption environment expected to remain sluggish in 2015
 The Group is well positioned to strengthen its leadership through

Building on its omnichannel expertise

Further roll-out of new product categories and services

Accelerated expansion of proximity formats
 The Group will pursue its initiatives to improve operational efficiency and has
set a cost savings objective of €30m to €40m for 2015
 It will also continue its efforts to maximize cash generation
 In the longer term, the Group confirms its objective to achieve a current operating
income margin of more than 3%, after finalization of the transformation of its model
and under stabilized market and economic conditions
February 27th, 2015
27
February 27th, 2015
Appendices
Q4 and full year revenue
Change vs Q4 2013
Change vs FY 2013
Reported
at constant
exchange rates
and comparable
scope of
consolidation
same-store
basis*
Reported
at constant
exchange rates
and
comparable
scope of
consolidation
same-store
basis*
1,014
0.2%
0.1%
1.0%
2,777
0.5%
0.4%
1.3%
226
1.8%
1.8%
-0.6%
659
0.7%
0.7%
-0.7%
Brazil
56
-7.7%
-4.1%
-4.7%
175
-11.3%
-3.4%
-3.9%
Other
countries
98
-0.5%
-1.1%
-1.1%
284
-2.6%
-3.1%
-3.1%
1,393
0.1%
0.1%
0.3%
3,895
-0.3%
-0.0%
0.4%
€m
France
Iberian
Peninsula
Group
Q4 2014
FY 2014
* At constant exchange rates and comparable scope of consolidation
February 27th, 2015
29
2014 sales by category
€m
2014
% Change
Technical products
2,185
1.6%
Editorial products
1,512
-3.2%
198
3.1%
3,895
-0.3%
Services
Total sales
February 27th, 2015
30
Non current operating income and expenses
€m
2013
2014
Non current operating expenses
-36
-13
Restructuring costs
-29
-13
Litigation and disputes
-5
0
Other risks
-2
0
Non current operating income
7
4
Gains on asset disposals
7
0
Other risks
0
4
-29
-9
Total
February 27th, 2015
31
Financial charges
€m
Cost of net debt
2013
2014
% Change
-0
-0
0%
Other financial charges (net)(1)
-11
-12
-4%
Financial charges (net)
-12
-12
-3%
(1) Includes expense on the cost of free consumer credit, the impact of discounting assets and liabilities and fees related to the revolving credit facility
February 27th, 2015
32
Net current income
€m
2013
2014
Income before tax
31
56
Non-current operating expenses and revenues
-29
-9
Current income before tax
60
65
Current tax (expense) / Income
-17
-17
1
2
-16
-15
44
50
Tax on non-current items
Total tax charge
Net current income
February 27th, 2015
33
Balance sheet
ASSETS in €m
2013
2014
EQUITY AND LIABILITIES in €m
Share capital
Goodwill
17
495
495
Conversion reserves
-3
-2
Other reserves
41
80
550
589
Reserves related to equity
332
70
68
181
163
8
7
28
33
0
0
Non-current assets
619
604
Inventories
473
469
Non-current liabilities
Accounts receivable
122
130
13
6
6
5
Other current assets
119
Cash & cash equivalents
Tangible assets
Non-current financials assets
Deferred tax assets
Other non-current assets
Current tax receivables
Other current financial assets
Current assets
Assets held for sale
Total assets
February 27th, 2015
2014
17
332
Intangible assets
2013
Equity Group Share
Equity attributable to minority interests
Equity
7
550
595
1
0
59
69
0
0
59
69
Short-term liabilities
0
0
Other current financial liabilities
5
3
693
768
Provisions
42
35
143
Tax liabilities
17
13
462
536
Other current liabilities
448
409
1,194
1,289
1,204
1,228
0
0
0
0
1,813
1,893
1,813
1,893
Long-term liabilities
Provisions for retirement and similar benefits
Deferred tax liabilities
Accounts payable
Current liabilities
Liabilities associated with assets classified as
held for sale
Total liabilities and equity
34
Cash flow statement
€m
Net income from continuing operations
2013
2014
16
41
59
4
12
57
6
18
Cash flow from operations before tax, dividends and interest
91
122
Change in working capital requirement
Income tax paid
15
-10
13
-14
Net cash flows from operating activities
97
121
Net CAPEX
Disposal subsidiaries net of cash transferred
Net other financial assets
Interests and dividends received
-49
-3
6
1
-49
-3
1
1
-45
-50
130
0
-1
-10
9
0
-0
-6
120
3
-1
-2
0
0
168
74
Net additions to depreciation, amortization and provisions
Financial interest income and expense
Net tax charge payable
Net cash flows from investing activities
Increase / decrease in equity and other transactions with shareholders
Treasury share transactions
Increase / decrease in other financial debt
Other interest and equivalent paid
Net cash flows from financing activities
Cash flow from discontinued operations
Impact of fluctuations in exchange rates
Net change in cash
February 27th, 2015
35
Working capital
As of
December 31, 2013
As of
December 31, 2014
Inventories
473
469
Accounts receivable
109
115
Accounts payable
-646
-713
Other operational working capital including Accounts
receivable and payable related to CAPEX
-363
-306
Operational Working capital
-427
-435
1
2
-4
-7
-430
-440
€m
Financial account receivable
Accounts receivable and payable relative to tax
Working capital
February 27th, 2015
36
Net cash position
Free cash flow: €72m
€m
122
18
9
-14
-2
-54
-6
0
535
461
Net cash
Cash Flow
Change in
position at
before tax, working capital
December 31, dividends and requirement
2014
interest
(before taxes)
February 27th, 2015
Corporate
income tax
paid
CAPEX
Increase in
capital
Net financial
investments
Net interest
paid and
dividends
received
Other
Net cash
position at
December 31,
2014
37
Shareholders’ funds
600,0
€m
9
500,0
37
0
0
1
400,0
300,0
595
550
200,0
100,0
0,0
Shareholder's equity
as of December 31,
2013
February 27th, 2015
Increase in capital
Total comprehensive
income
Treasury share
Dividends paid
Valuation of sharebased payments
Shareholder's equity
as of December 31,
2014
38
Exchange rates
2013
2014
BRL (Brazil)
2.8685
3.1221
CHF (Switzerland)
1.2310
1.2146
NB : average rates
February 27th, 2015
39
Store network
December, 31th 2013
December, 31th 2014
Owned
Franchised
Total
Owned
Franchised
Total
France
87
21*
108
85
27*
112
Iberian Peninsula
44
0
44
47
0
47
Brazil
11
0
11
12
0
12
Other countries
13
0
13
13
0
13
155
21
176
157
27
184
Group
* Included 1 store in Morocco
February 27th, 2015
40

Présentation PowerPoint

Transcription

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